China Evergrande (ORCQX: EGRNF) stock is up 5,900%. But do note this isn’t the Hong Kong stock with that decent liquidity that listing has. That’s up 60% in itself, on the basis that Country Garden just managed to scrape through making those bond payments within the 30 day grace period. But no, this 5,900% rise is in the OTC stock in the US. This is a real price rise too, it’s not just nominal. We should also think of it as not being important at all. Because the trade is so thin that it would be, even is, near impossible to take advantage of it.
That’s the whole of the trade yesterday.
That then drives these price changes:
China Evergrande stock price from Google Finance
Or if we look just at the day:
Which is where we get our 5,900% rise from.
The price movement has been driven by a few $ thousand’s worth of trade. This isn’t a market that anyone can trade in any volume in. And having got into a position it would be very difficult to get out again. Without, obviously, moving the market against your position.
We’ve talked before about the China Evergrande US quote, the OTC Evergrande. The basic conclusion being that yes, there are wild, wild, price movements but trade is so thin that it’s near impossible to benefit from them. Trade sizes are in the hundreds of dollars and spreads are massive. It would also be near impossible to get out of a position of any size.
